The Decline Of BlackBerry: Where RIM Went Wrong

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The mobility market is arguably the fastest-growing and most competitive in the IT industry today – yet one of the biggest pillars of that market, Research In Motion, may be crumbling.

While some smartphone vendors such as Apple and Samsung continue to grow revenue and increase their market footprint, others find themselves struggling to stay in the game. And some solution providers say RIM may soon find themselves in this less fortunate second category if the Ontario-based BlackBerry maker doesn’t make some changes – and quickly.

Statistics published by mobile market analyst ComScore show that as of October, Google’s Android OS accounted for 46.3 percent of the smartphone market share, while Apple claimed the runner-up spot with 28.1 percent. RIM followed next with 17.2 percent of the share. Unlike its competitors, though, RIM’s hold on the market has slipped rapidly compared to the 21.7 percent it held only three months earlier in July.

RIM declined to comment on their recent shift in the smartphone market; solution providers, however, have attributed the BlackBerry vendor’s shrinking market share to a variety of causes. The first is simple, but perhaps the most difficult for RIM to overcome: a lack of innovation in an industry that is racing non-stop toward the "latest and greatest."

Tim Shea, CEO of Alpha NetSolutions, a Millbury, Mass.-based managed service provider, feels that the evolution of BlackBerry smartphones pales in comparison to that of other smartphones – most notably, the iPhone. "If you just look at a typical BlackBerry phone, it’s really hard to tell a new one from one from five years ago. The form factor is the same," Shea told CRN. "From my perspective, they’re just not keeping up."

Shea noted that, while a bigger screen or a virtual keyboard could give RIM a much-needed boost, it still may not be enough to compete with the likes of Apple and Google. With the iPhone 4S touting never-before-seen features such as Siri, an "intelligent assistant" application you can literally talk to, it’s safe to say that the innovation bar has been raised pretty high. In the mobility market, it seems catching up isn’t enough – you have be there first.

What’s more, as smartphones become even "smarter," end-user expectations have risen. Bill Lucchini, COO of OnForce, an on-site services marketplace that matches service buyers with service providers, told CRN that he’s seen a shift in the smartphone market as more and more users expect their phones to meet both professional and personal needs.

"I think a lot more people – especially the field services guys – are thinking about their phone as their office," Lucchini said. "That’s a key trend, as people’s minds shift from it [the smartphone] being a more and more capable device, to it being a replacement for my other devices. That fundamentally changes the market."

As a result, a device like RIM’s BlackBerry – which has been equated almost exclusively with the corporate world since its launch in 1999 – may leave some users wanting more.

RIM’s lack of an application ecosystem may also be contributing to its declining market share, solution providers speculate. As iOS and Android developers continue the rapid introduction of apps into their respective app stores, it’s unclear whether BlackBerry developers are following suit.

"It seems like the two success models are both an ecosystem and a hardware device. I just want to know where BlackBerry’s ecosystem is," said Lucchini. "It doesn’t mean there isn’t another success model out there. Lots of people launch devices. I just don’t see a way from them [RIM] to be successful without something more than a device."